Livingstone Marufu Business Reporter
ZIMBABWE’s fertiliser companies have started drawing funds from the $56 million African-Export and Import Bank (Afreximbank) facility which was designed to support imports of fertiliser for the 2017 /2018 cropping season.
The Herald Business understands that the country’s fertiliser producing firms — Windmill, Zimbabwe Fertiliser Company, Omnia and Sable Chemicals — have already drawn down $15 million to enable them to import fertiliser or raw materials used in manufacturing the product to avert potential shortages. The move to priorities capacitating fertiliser firms follows the success of the specialised import substitution programme, Command Agriculture, which was started in the last summer cropping season. Zimbabwe needs 500 000 tonnes of compound D and ammonium nitrate if it is to have a successful farming season.
Windmill retail manager Mr Cleophas Mupariwa told The Herald Business last week that fertiliser producers “will always be drawing down raw materials from the bonded $56 million facility as we get foreign currency”.
“Production of fertiliser will therefore continue in the meantime as we await for other facilities,” said Mupariwa.
The Reserve Bank of Zimbabwe is currently working on a new $150 million letters of credit facility to support fertiliser, fuel and crude oil importation. From the $150 million, $56 million will go to fertiliser importation ahead of the 2017/ 2018 summer cropping season.
Given an improved output last year mainly due to Command Agriculture, high level of organisation of the programme and availability of adequate rains; fertiliser availability remains critical to the sector. The RBZ is attending to fertiliser producers’ requirements on a continuous basis and fertiliser will be distributed soon.
In January 2017, most farmers — both self-financing and Command Agriculture-contracted — have been struggling to get top-dressing fertiliser due to foreign currency allocation hiccups that have seen local manufacturers fail to import raw materials but this year Government wants to import AN before the start of the season.
Fertiliser will be transported and distributed via rail and road from South Africa and Mozambique.
Agriculture, Mechanisation and Irrigation Development Deputy Minister Davison Marapira weighed in: “We are happy that Government and monetary authorities have worked tirelessly to ensure adequate and constant supplies of top-dressing and basal fertiliser ahead of the 2017/2018 summer cropping season.”
$460 million has been mobilised for the 2017/2018 season while bankers have opened a $1 billion loan book for the new season. Zimbabwe Commercial Farmers’ Union president Mr Wonder Chabikwa said, “We are very delighted with Government’s desire to ensure that the country has adequate basal and top dressing fertiliser ahead of the new season. We hope the fertiliser will be distributed to farmers early to avoid last year’s situation of top dressing fertiliser shortages in January.”
Fertiliser prices have jumped to $41 from $32 per 50kg bag of compound D, and to $39 from $33 for 50kg of ammonium nitrate.
The Zimbabwe Fertiliser Manufacturers’ Association says the costs of imported raw materials and packaging in an environment characterised by foreign currency shortages have necessitated the price increases. Government has allowed those with free funds to import fertiliser to avoid shortages this summer cropping season and many agro-based companies have started implementing that.